The quantity of mortgage applications that are being approved by providers for aspiring homeowners has reached its highest point since the start of the economic downturn back in 2007, according to the Bank of England.
The BOE identified that the total quantity of mortgages that have been approved, but not yet distributed reached almost 77,000 in January this year, marking the first occasion of this occurrence in the last 7 years.
The data implies that house sales will continue to boom over the upcoming months, which will be yet another blow to low income aspiring homeowners who will not welcome the news of demand further increasing the prices of houses across the UK.
Approvals are usually regarded as an accurate indicator of future patterns and movements in the property market, and clearly illustrate that prices are set to soar substantially over the next few months.
Last year, over a million houses were sold in Britain, which was a 15% rise on the year before and the first time that increases of this severity had been witnessed since back in 2007.
However politicians and market experts alike have been vocal in their criticism of the government over their lack of financial backing into house building programmes that would bring some form of balance back into the supply demand ratio that is sending house prices rocketing at this current time.
Ray Boulger, of prominent mortgage provider John Charcoal said: “Approvals have been going up quite strongly for the past year.
“I think gross mortgage lending in the first quarter of the year will be up considerably on last year, by at least 35%, but for the rest of the year, the increase will be more modest.”
And Mr Boulger forecasted that property prices would increase by a monumental 8% of 2014, which might price out those with middle incomes from entering onto the property ladder this year.
2013 saw an astonishing upturn in the property market, with the governmentís Help to Buy and Funding for Lending schemes contributing heavily to the increased demand and rejuvenated consumer confidence across the UK.
Funding for Lending was unveiled by the Bank of England in the second quarter of last year, and provided banks and loan providers with low interest loans on the condition that they pass on the savings to customers to borrow.
The impact is has been hugely felt in the property market, where increased consumer spending power has enabled a number of households to be able to be able to financially attain the acquisition of a mortgage by capitalising on low interest loans.
The Help to Buy scheme, unveiled last Autumn, further increased the financial viability of purchasing a property, as it lowered deposit requirements to as small as just 5%, and has granted prospective homeowners the ability to obtain 95% loan to value mortgages.
Collectively, the two schemes, as well as the staggering fall in unemployment in the country have contributed towards the huge increase in mortgage approvals across the UK, though whether this is necessarily a good thing is highly contentious indeed.
Compare Mortgages with MoneyExpert.